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HomeMy WebLinkAbout99-284 Resolution No. 99-284 RESOLUTION ACCEPTING THE PROPOSAL OF CROWE, CHIZEK AND COMPANY LLP FOR AUDITING SERVICES BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ELGIN, ILLINOIS, that pursuant to Elgin Municipal Code Section 5 . 02 . 020B (6) the City Council hereby finds that an exception to the requirements of the procurement ordinance is necessary and in the best interests of the city; and BE IT FURTHER RESOLVED, that Joyce A. Parker, City Manager, be and is hereby authorized and directed to accept the proposal on behalf of the City of Elgin of Crowe, Chizek and Company LLP for auditing services, a copy of which is attached hereto and made a part hereof by reference . s/ Ed Schock Ed Schock, Mayor Presented: November 17, 1999 Adopted: November 17, 1999 Omnibus Vote : Yeas 6 Nays 0 Attest : s/ Dolonna Mecum Dolonna Mecum, City Clerk II,I CROWE CHIZEK November 5, 1999 The Honorable Mayor Members of the City Council City of Elgin 150 Dexter Court Elgin,IL 60120-5555 This letter confirms our understanding of the arrangements for Crowe, Chizek and Company LLP (Crowe Chizek) to audit and report on the general financial statements of the City of Elgin, Illinois as of and for the year ending December 31, 1999. Also, we will assist you in preparing the following additional information that will not be subjected to the auditing procedures applied in our audit of the general purpose financial statements. Comprehensive Annual Financial Report Transmittal Letter Statistical Section AUDIT SERVICES Our Responsibilities We will audit the general purpose financial statements of the City of Elgin, Illinois for the period indicated. Our audit will be a Single Audit made in accordance with generally accepted auditing standards; the standards for financial audits contained in "Government Auditing Standards," issued by the Comptroller General of the United States; the Single Audit Act; and the provisions of OMB Circular A-133. We will plan and perform the audit in accordance with generally accepted auditing standards. Those standards require that we obtain reasonable, rather than absolute, assurance about whether the financial statements are free of material misstatement, whether caused by error or fraud. A material misstatement, therefore, may remain undetected. We will examine, on a test basis, evidence supporting the amounts and disclosures in the financial statements and evaluate the accounting principles used and the overall financial statement presentation. We will assess the risk that errors or fraud might cause the financial statements to be misstated by an amount that we believe would influence the financial statement users. Accordingly, an audit is not designed to detect error or fraud that is immaterial to the financial statements. Our opinion will state whether we believe the financial statements present fairly, in all material respects, the financial position, results of operations, and cash flows of the City of Elgin, Illinois in conformity with generally accepted accounting principles. If, during the course of our engagement, we find that we will be unable to issue an unqualified opinion on the financial statements, an explanatory paragraph will be required, or that we are unable to complete our audit,we will notify you of the problems encountered. CROWE,CHIZEK AND COMPANY LLP ONE MID AMERICA PLAZA POST OFFICE BOX 3697 OAK BROOK,ILLINOIS 60522-3697 630.574.7878 FAX 630.574.1608 A member of Horwath International The Honorable Mayor Members of the City Council City of Elgin November 5,1999 Page 2 An audit includes obtaining an understanding of internal control sufficient to plan the audit and to determine the nature, timing,and extent of audit procedures to be performed. An audit is not designed to provide assurance on internal control or to identify reportable conditions. We will communicate, either orally or in writing, to the Council and senior management any matters coming to our attention that, in our judgment, represent significant deficiencies in internal control which could adversely affect the City of Elgin,Illinois' ability to record,process, summarize, and report financial data. We will also communicate suggestions we have to improve controls and business operations. Our engagement is not designed to address legal or regulatory matters,which matters should be discussed by you with your legal counsel. We have been engaged by the Council, and our audit is intended for the benefit of the City of Elgin, Illinois. Our audit report will therefore be addressed to the Council. The audit will not be planned or conducted in contemplation of reliance by any third party or with respect to any specific transaction. Therefore,items of possible interest to a third party may not be specifically addressed or matters may exist that could be assessed differently by a third party. The working papers for this engagement are the property of Crowe Chizek and constitute confidential information. However, we will make certain workpapers available for review by third parties with your permission and upon request,at our discretion. Access to the requested workpapers will be provided under the supervision of Crowe Chizek audit personnel at a location mutually agreed upon. The City of Elgin,Illinois'Responsibilities The management of the City of Elgin, Illinois is responsible for the financial statements and for maintaining effective internal control that will, among other things, permit the preparation of financial statements in conformity with generally accepted accounting principles. Although we can advise you, it is management's responsibility to adopt sound accounting policies, maintain an adequate and efficient accounting system, safeguard assets, and devise policies to prevent illegal acts. Management's responsibility for financial reporting includes establishing a process to prepare the accounting estimates included in the financial statements. Management's judgments are necessary and are typically based on its knowledge and experience about past and current events and its expected courses of action. Management is responsible for making all financial records and related information available to us. Management agrees to provide Crowe Chizek with certain written representations relating to matters contained in or related to the financial statements. Because of the importance of management's representations to an effective audit, the City of Elgin, Illinois agrees to release Crowe Chizek and its personnel from any liability and costs relating to our services under this letter attributable to any misrepresentations by management contained in the representation letter. Management has the responsibility to determine whether the City of Elgin, Illinois' systems, or any other systems such as those of the City of Elgin, Illinois' vendors, service providers, or any The Honorable Mayor Members of the City Council City of Elgin November 5, 1999 Page 3 other third parties, are Year 2000 compliant and to determine whether the City of Elgin, Illinois has addressed or will be able to address on a timely basis all of the systems that may be affected by the Year 2000 issue. An audit of financial statements conducted in accordance with generally accepted auditing standards is not designed to detect whether such systems are Year 2000 compliant. You agree to submit to us copies of all printer's proofs or typed drafts of reports and documents to be sent to your citizens,other governmental authorities,or other third parties before filing or publication,if those reports contain our reports or refer to us. In addition,you agree to request our permission to use our report in any such documents. In the event Crowe Chizek is requested pursuant to subpoena or other legal process to produce its documents pertaining to the City of Elgin,Illinois in judicial or administrative proceedings to which Crowe Chizek is not a party, the City of Elgin, Illinois will reimburse Crowe Chizek for its professional time, plus out-of-pocket expenses, including reasonable attorney fees incurred in responding to such request. The assistance to be supplied by your personnel, including the preparation of schedules and analysis of accounts, has been discussed and coordinated with Mr. James R. Nowicki. The timely completion of this work will assist us in achieving an efficient performance of our work. FEES Our fee of$42,200 and billing procedures will be as stated in our proposal. We appreciate the opportunity to be of service to the City of Elgin,Illinois and believe this letter accurately summarizes the significant terms of our engagement. If these arrangements are in accordance with your understanding,please sign and date below and return a copy of this letter at your earliest convenience. If you have any questions, please contact Louis G. Karrison, Partner,or Daniel A. Berg,Engagement Executive,at(630)574-7878. Very truly yours, Crowe,Chizek and Company LLP By: ,��---- Partner City of El•'- ois By: it 4__ l Date approved: / c�/' %�f , flC ) City of Elgin Agenda Item No. ti Mt October 27, 1999 TO: Mayor and Members of the City Council FROM: Joyce A. Parker, City Manager SUBJECT: Extending Audit Contract PURPOSE The purpose of this memorandum is to seek approval for extending the current auditing services contract for another year. BACKGROUND The City of Elgin recently completed a five year agreement with the auditing firm of Crowe Chizek and Company for preparation of the City' s audit for the years ending December 31, 1994-1998 . Personnel from the firm also performed the audit during the years 1985-1989 . The existing contract was awarded as the result of a bid process in 1994, with Crowe Chizek submitting the lowest fee. The yearly price ranged between $36, 000 and $42, 200 with price increases ranging from 3 . 89% to 4 .280. Crowe Chizek has offered to perform the 1999 audit at no increase over the 1998 fee of $42, 200 . The Y2K "Millennium Bug" at the beginning of the year is going to consume additional time and effort . The efficiency of maintaining the same audit firm during this time frame will free up available time to address Y2K issues that may arise. Crowe Chizek has also been helpful in providing assistance in obtaining the Government Finance Officers Association' s Certificate of Achievement for Excellence in Financial Reporting and overall has performed audit services as well as other accounting services very well . COMMUNITY GROUPS/INTERESTED PERSONS CONTACTED None. FINANCIAL IMPACT Sufficient Funds have been budgeted in the 2000 Fiscal Services Department budget, account number 010-2003-718 . 30-02, to cover the 1999 audit fee of $$42 , 200 . ► . Extending Auditing Contract October 27, 1999 Page 2 . LEGAL IMPACT I� /' The contract extension requires an exception to the Procurement ►►��^^''�� Ordinance . ALTERNATIVES Send the 1999 audit contact out for bid. RECOMMENDATION It is recommended to accept the proposal of Crowe Chizek to provide auditing services for the City of Elgin for the next year. Res ectfully submitt , Jo A Parker City Manager